The Effect of Social Capital on Performance of Coffee-Based Agribusiness in Tabanan Regency, Bali Province, Indonesia

Small and Medium Enterprises (SMEs) is one of the businesses that have an important role in the country's economy. The potential of these SMEs needs to get serious attention from the local government in order to increase the potential of the local area in supporting the economy. Several SMEs have been developed in Tabanan Regency considering local potential-based agribusiness, namely coffee processing agribusiness, especially Robusta coffee. The development of SMEs does not only require financial capital but also requires social capital. The purpose of this study was to analyze the effect of social capital on the performance of coffee-based agribusiness SMEs in Tabanan Regency, Bali Province.The social capital in this study includes trust, norms and networks, Sampling was taken by using Solvin technique from the members of 16 SMEs, counting to 73 respondents. The location of the study was conducted by purposive sampling. The data used were qualitative and quantitative data and analyzed by using Partial Least Square (PLS) - SEM analysis. The result shows that the construct of trust had an effect on the performance of SMEs of coffee-based agribusinesses of 0.482 (48.2 per cent) with the level of significance of p values < 0.05. The construct of norms affected the performance of SMEs by 0.326 (32.6 per cent)with the significance level of p values < 0.05. The network construct influenced the performance of SMEs by 0.287 or 28.7 per cent with the significance level (p values < 0.05). The results of combined analysis show that social capital consisting of trust, norms, and networks on the performance of coffee-based agribusiness SMEs had a coefficient of determination (R-square) of 0.448, reflecting the effect is categorized moderate.In this study it shows that social capital consisting of trust, norms, and networks had a positive and significant effect on the performance of coffee-based agribusiness SMEs in Tabanan Regency. There needs to be strengthening of social capital from both SME players and government officials for business development together with other capital to achieve business success. Key Words: social capital, SMEs performance, coffee-based agribusiness.